By: Monish Mishra, Head - Service Line Markets & Strategic Engagements, UK and EU

Whether you’re a digital-native company or a traditional business, innovation is key to staying ahead of the competition. There has been a tectonic shift in how consumers consume services in Airbnb-style models and use TikTok to unleash their creativity. With so many companies competing for their attention, it’s vital to stand out from the crowd with new products, services, and business models. Innovation is the cornerstone for the continued success of businesses, incremental and quantum innovation are imperative for businesses to grow and succeed.

Innovation in the connected world today comes from employees, customers, or partners – and businesses need to be prepared to harness a build-up on innovation. That’s why companies need a modern approach to the innovation ecosystem to power a collaborative network of employees, clients, partners, and stakeholders, with a common goal who can openly share, collaborate, learn, and co-create. With this ecosystem in place, companies can quickly identify and develop new ideas, bring them to market, and scale them up to achieve commercial success. The core business can then innovate while exploring and building new businesses in parallel. For example, Samsung and the UK-based design magazine Dezeen launched the “Out of the Box” competition, challenging entrants to design items for the home that could be created out of cardboard boxes. The contest helped Samsung reimagine its packaging and sustainability while tapping into Dezeen’s creative readership. Employees, customers, and partners become co-creators in a modern innovation ecosystem.

To get the most from the innovation ecosystem, companies need a dual approach to allow ideas to flourish:

• Inside-out: The best ideas often come when people across different functions work together continuously and adopt out-of-the-box ideas. For example, Haier took a radical approach to the innovation ecosystem: The company evolved into an open entrepreneurship platform where all talent could join and start their own business. Although this model wasn’t immediately successful, as changing mindsets and cultures don’t happen overnight, Haier worked with small pilot programs and then replicated the most successful.
• Outside-in: Enterprises should be committed to creating an open innovation ecosystem without “organizational boundaries.” They need to build a collaboration platform to promote the opening-up and sharing of resources between enterprises, relevant partners, and external resources. Level 39 is an innovation ecosystem of leaders in cybersecurity, fintech, retail tech, and smart cities. Members can be based on-site or join virtually as ecosystem partners. Alibaba connects customers, merchants, and companies, making it easy to do business anywhere in the world. Companies that treat customers and partners as collaborators will most likely lead the innovation race.

There’s no one-size-fits-all formula for creating a modern innovation ecosystem, but here are a few valuable tips to get you started:

• Track innovation constantly. Companies need a holistic approach to identify, track, catalog, and leverage new ideas. Tracking ideas throughout every department and how they’ve performed can give you valuable insights into what works well, which doesn’t always come right away but is key to your long-term growth prospects. For instance, some innovative concepts may not be tested immediately, but they’re still important as part of an overall strategy for future use cases or implementations. These five phases will become core to your tracking process: conception – capture ideas; evaluation – shortlist the best; identify your new business value creation; run a pilot to either succeed or learn and move to the next big idea if necessary; and finally, scale to reap business benefits.
• Embrace a ‘fail-fast’ approach to your innovation. Rather than sinking time and resources into a single idea, it’s better to move on quickly if an idea doesn’t work out. Also, failing fast allows organizations to take risks without incurring high costs. Thus, failing fast must become an essential part of the innovation ecosystem.
• Take a platform-centric approach: Platform-driven innovation has been the driving force behind many companies’ successful transformations. One notable example is how Lego established a “design by me” platform, where customers can download the necessary software, upload their own ideas, and integrate them into Lego’s new product development process.
• Go for a cloud-first approach to innovation. The modern innovation ecosystem platform should be modular, accessible, and adaptable. The cloud plays a vital role in helping companies innovate by providing teams with readily affordable tools that accelerate experimentation across all industries. The elasticity, scalability, and speed of experimentation combine to make it an essential ingredient in the modern ecosystem to facilitate fast-paced innovation.

Innovation is complex and challenging, but not as challenging as being left behind as “irrelevant.” When Tesla came to light, few automotive companies took it seriously. Today, this ‘industry outsider’ looks to hit a USD 1 Tn valuation by the end of 2022. In this era of convergence, organizations must understand that innovation, as well as disruption, can come from anywhere. By adopting the new tools of the modern innovation ecosystem, namely cloud services, companies can prioritize innovation and increase their chances of discovering the future of their industry, business, and work.

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